The New Arms Race Is Digital: Defense Data Centers Become Critical Infrastructure for Global Military Power

NEW YORK, June 16, 2026 /CNW/ -- Market News Updates News Commentary - Due to the rapid progress of artificial intelligence, cybersecurity measures, and real-time intelligence gathering, data centers have become essential in modern defense operations. Military organizations increasingly rely on these secure facilities to manage data from various sources such as satellites, drones, radar systems, battlefield sensors, and intelligence networks. These centers provide the necessary computational power to sift through large volumes of data, support command-and-control activities, and deliver timely intelligence to military personnel. As defense agencies enhance their digital frameworks, the adoption of AI-driven data centers and military cloud computing is gaining momentum globally. The market for government and defense AI data centers was valued at around $12.5 billion in 2025 and is projected to exceed $64 billion by 2033, highlighting the growing importance of advanced computing in protecting national interests.  A growing group of forward-moving companies are rapidly expanding operations and positioning themselves at the forefront of the Data Center, AI, Autonomous and Tech industries, including:  VisionWave Holdings Inc. (NASDAQ: VWAV), Vertiv (NYSE: VRT), Digital Realty (NYSE: DLR), Applied Digital (NASDAQ: APLD), Hewlett Packard Enterprise Company (NYSE: HPE).

A rapidly expanding application in defense data centers is the integration of artificial intelligence and autonomous systems. AI-powered platforms can quickly analyze surveillance footage, identify potential threats, process satellite images, and assist in the operations of autonomous drones and robotic systems. Furthermore, military institutions are utilizing high-performance computing infrastructure to improve mission planning, predictive maintenance, logistics efficiency, and battlefield decision-making. The broader field of AI in aerospace and defense is expected to grow from approximately $24.5 billion in 2024 to over $43 billion by 2030, indicating the increasing role of AI-driven data infrastructure in defense operations.

The need for advanced defense data centers is also being driven by cybersecurity and secure cloud computing requirements. Governments require highly secure facilities capable of protecting classified data, defending against cyber threats, and ensuring uninterrupted access to critical systems. Emerging technologies such as modular and containerized data centers enable military organizations to deploy computational capabilities closer to operational environments while maintaining security and resilience. The military cloud computing sector is predicted to expand from around $12.8 billion in 2024 to $34.2 billion by 2034, while the defense cybersecurity market is forecasted to increase from $33.3 billion in 2025 to nearly $79 billion by 2033. These trends highlight the growing strategic importance of secure data infrastructure across various domains including land, air, sea, space, and cyber.

VisionWave (NASDAQ: VWAV) Signs Term Sheet Regarding a Proposed Tier IV Data Center in Israel Through a Proposed Joint Venture with Lucky Whale Production Limited -- NASDAQ-listed VWAV would hold an approximately 51% effective look-through interest in a proposed Tier IV data center project; consideration to be satisfied in shares valued at approximately US$40 million -- VisionWave Holdings Inc. ($VWAV) ("VisionWave" or the "Company") today announced that it has entered into a term sheet (the "Term Sheet") with Lucky Whale Production Limited ("Lucky Whale"), a Hong Kong-incorporated project sponsor active in real estate project management, to establish a jointly-held company (the "Joint Company") for the proposed development, ownership and operation of a Tier IV data center campus in Beth Shemesh (Jerusalem district), Israel. The Term Sheet sets out proposed principal terms only. The proposed transaction has not been consummated and remains subject to the completion of due diligence, the negotiation and execution of definitive agreements, and the satisfaction of numerous conditions, including required corporate, stockholder, SEC and Nasdaq approvals. There can be no assurance that the proposed transaction will be completed on the terms described, or at all.

The transaction would give VisionWave Holdings a 68% stake in the Joint Company, which in turn would hold 75% of the project-level special purpose vehicle. This chain structure would give VisionWave an effective look-through interest of 51% in the land, the building permit and the data center project. As consideration for the acquired rights, the Company would allot to the Land Owner shares of VisionWave common stock valued at approximately US$40,000,000, priced by volume-weighted average price (VWAP) near closing, on an all-share basis with no cash component. The number of consideration shares would be fixed near closing, and the issuance, together with the Company's other recent and pending equity issuances, would be dilutive to existing stockholders. Any issuance would be subject to required approvals, including, to the extent required under Nasdaq rules, approval by the Company's stockholders.

VisionWave further would commit, in the definitive agreements, to arrange the full capital required to construct and commission the data center, through capital-markets activity and/or institutional project financing, consistent with the original development plan. The Project would require substantial additional capital, and there can be no assurance that such financing would be available on acceptable terms, or at all.

"We are pleased to have signed a term sheet for a proposed joint venture to develop a Tier IV data center in Israel. The proposed all-share structure would allow us to pursue a 51% effective interest in the project without an upfront cash outlay, while we conduct due diligence and work toward definitive agreements. Completion of the transaction remains subject to a number of conditions, and we will provide further updates as appropriate." Said Doug Davis, Chief Executive Officer, VisionWave Holdings, Inc.

The Proposed Project - The Project is contemplated to be an underground data center campus the subject of an Israeli statutory planning framework. The Phase-1 build is currently contemplated to comprise approximately 15,000 square meters across 10 data halls and to target 10.5 MW of IT load, with a 2N redundant topology targeting Tier IV certification by the Uptime Institute. These specifications are preliminary design parameters, have not been independently verified by the Company, and are subject to change. Key contemplated attributes include:

• Underground hardened structure engineered to mission-critical specifications, including protection against direct long-range threats
• Dual 2 × 16 MVA power feeds with 24-hour autonomous on-site fuel and water reserves
• Direct liquid cooling (DLC) provision to support AI/HPC workloads
• Carrier-neutral campus with two physically separated Meet-Me Rooms
• Location adjacent to the Galilee Medical Center
• Statutory excavation permits reported to be in place, and an engineering package across structural, electrical, mechanical, MEP, security and communications

"The Data Center is an underground, hardened Tier IV-targeted design. We are pleased to bring this project into a proposed joint venture with VisionWave and to advance it through due diligence and definitive documentation." Said Yuval Birman, Chief Executive Officer, Lucky Whale Production Limited.  Continued…  Read this full release and additional news for VWAV by visiting: https://www.vwav.inc/newsroom/

Why Investors Are Watching the Data Center, AI, Autonomous and Similar Industries:

• Defense AI data center market projected to grow from $12.5 billion in 2025 to $64 billion by 2033.
• Military cloud computing market expected to reach $34.2 billion by 2034.
• Defense cybersecurity market forecast to approach $79 billion by 2033.
• AI-powered defense applications are driving demand for high-performance computing infrastructure.
• Autonomous drones, satellite systems, and battlefield intelligence platforms require increasingly sophisticated data center capabilities.
• Defense modernization programs worldwide are creating long-term growth opportunities for secure cloud, AI, and data center providers.

Other recent developments in the data center, autonomous, defense/military/AI industries of note include:

Vertiv (NYSE: VRT), a global leader in critical digital infrastructure, recently announced the completed acquisition of ThermoKey S.p.A., a leading provider of heat rejection and heat-exchange technologies with long-standing relationships across original equipment manufacturers (OEMs) and system integrators.

The acquisition expands Vertiv's thermal management portfolio and manufacturing capabilities, particularly in Europe, Middle East, and Africa (EMEA), and strengthens its ability to deliver system-level solutions across the full thermal chain for AI factories and high-density data centers. ThermoKey benefits from Vertiv's global scale, supporting accelerated growth and expanded market access while enhancing Vertiv's ability to provide thermal architectures that help customers plan for multiple compute generations ahead.

Vertiv currently uses ThermoKey's technologies in select thermal solutions. ThermoKey's technology set includes heat-exchange solutions, dry coolers, and compatibility with low-GWP and natural refrigerants that complement Vertiv's portfolio, giving customers flexibility to optimize for performance, site conditions, and growth. Founded in 1991, ThermoKey brings more than 30 years of engineering expertise, in-house design and production capabilities to support its customers and markets.

Digital Realty (NYSE: DLR), the world's largest cloud- and carrier-neutral data center platform, recently announced the establishment of its Malaysia platform, marking a key milestone in its Asia Pacific expansion. The company has planned to develop and scale its data center capacity in Malaysia to approximately 32 megawatts (MW), integrating Malaysia into its global platform designed for interconnection, resilience and scale.

The milestone was commemorated at an inauguration ceremony officiated by YB Gobind Singh Deo, Minister of Digital for Malaysia, Ms. Zuaida Abdullah, Deputy Chief Executive Officer, Investment Development, Malaysian Investment Development Authority (MIDA), En. Wan Murdani, Senior Vice President, Malaysia Digital Economy Corporation (MDEC), alongside Digital Realty leadership including Serene Nah, Managing Director and Head of Asia Pacific, Govind Choudhary, General Manager, Southeast Asia and India, and Billy Lee, Chairman, CSF Advisers Sdn Bhd & Advisor for Digital Realty in Malaysia.

Applied Digital (NASDAQ: APLD), a designer, builder, and operator of high-performance, sustainably engineered data centers and colocation services for artificial intelligence, cloud, networking, and blockchain workloads, recently announced it has entered into a new long-term lease agreement at Delta Forge 2, a purpose-built AI Factory campus located in a new southern state. The lease is with a U.S. based high investment-grade hyperscaler, marking the company's fifth AI Factory campus overall.

The agreement covers 210 MW of critical IT load under a 15-year take-or-pay structure with renewal options, representing approximately $5.2 billion in base-term contracted revenue, or approximately $12.7 billion if all renewal options are exercised over a 30-year total term.

"Two years ago, we made a deliberate decision to build a company that scales, not just builds data centers," said Wes Cummins, Chairman and Chief Executive Officer of Applied Digital. "We call it our franchise model — a core team of design, construction, and operations professionals replicated across every campus, in every market. Continued demand from leading hyperscalers across five campuses is strong validation of our model."

Hewlett Packard Enterprise Company (NYSE: HPE) recently announced that S k y Co., Ltd. has deployed HPE Private Cloud AI, a turnkey AI factory solution that is part of the NVIDIA AI Computing by HPE portfolio. Delivered in just one month, the solution enables the company to safely harness sensitive data while accelerating AI-driven development and internal workflows under strict data governance.

S k y Co., Ltd. is a leading Japanese technology company with expertise in software development and system integration, with capabilities spanning enterprise and embedded systems from development through evaluation and validation. Given the highly sensitive nature of the data it manages, S k y Co., Ltd. enforces strict data governance policies and exercises tight control over the use of public cloud AI services, yet AI-driven development remains essential. To address this, S k y Co., Ltd. selected HPE Private Cloud AI, an integrated, on-premises solution co-developed by HPE and NVIDIA, enabling the secure use of sensitive data for AI.

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